Ramen Noodles By: James Gallagher Matt Nelson

Stores Audited Fayetteville ▫Walmart Wedington-10 ▫Harps Fiesta-18 ▫Target-3 ▫Harps Crossover-24 ▫Harps Wedington-23 ▫Walgreens MLK-5 ▫Walmart MLK-23 ▫CVS College-3 ▫Dollar Tree Garland-4 Rogers ▫Walmart Pleasant Crossing-5

Listing of Firms Dominant Brands ▫Maruchan ▫Nissin Struggling Brands ▫Nongshim

Category Role: Maintain Average to high retail margins depending on store and location. Narrow variety but deep assortment of flavors. Requires larger shelf space in stores that sell a lot of groceries, but almost no space in stores that don’t primarily sell grocery products. Areas around pasta or soy sauce Important for lower income families that need cheap meals that are quick to prepare. Medium household penetration, and high competition. Winning on costs is important.

Ramen Noodles Sales and Penetration RegionCATEGORYITEM $ITEM BUYERS ITEM PENETRATIO N ITEM $ PER ITEM BUYER ITEM TRIPS PER ITEM BUYER TOTAL U.S.ORIENTAL FOODS- RAMEN NOODLES $31,340,2797,940, WEST SOUTH CENTRAL ORIENTAL FOODS- RAMEN NOODLES $4,353,3601,118,

Blattberg’s Category Role Matrix Flagship Sales Dollar Volume HighMediumLow Core Traffic Cash Machine Under Fire Maintain Rehab Gross Margin % High Low

Category Roles: Competition and Penetration “Scrutiny” Fresh meat, Dairy, Produce, Bakery Household Penetration HighMediumLow “Win on Deal” Strong Brands Detergents, Paper products “Win with Depth” Canned items, salad dressings, frozen foods “Win on Costs” Differentiation on depth, private label True Service: Carried because “no else will” Baking supplies “Man in the Mirror?” Infant formula, disposable diapers Intertype Competition High margins Low competition Low margins Competitive

Private Label Private label brands do not exist with Ramen noodles. The dominant brands in the category already set their prices as low as they can and because of this they act as the private label, so stores can’t afford to price their brands any lower.

Differentiation There is not a lot of variety between brands, and each different brand makes a very similar product. There is a lot of depth within the category because people like all different kinds of flavors. Product is consumer driven because consumers are looking for low cost, easy, quick meal that is cheap.

SPSS: Facings

Our Customer Our product is very common with families. ▫Comfortable: Both small and large families ▫Struggling Families: Very prominent with struggling families and the larger struggling families is where you find densest customer base. Very uncommon with singles, couples and senior citizens Our buyers are most likely going to buy high amounts of Private label as well

Product Snapshot: Nissin

Product Snapshot Demographics MaruchanNissin

Differences in Store Trading area We expected to see the Wal-Mart on MLK have more depth and assortment than the Walmart on Pleasant Crossing. We figured that the MLK store was going to have lower income families as well as college students (broke college students). Found this to be the case

Circular Trade Area: Wal-Mart MLK and PC Age of Head of Household Age % % %517 Age % % %195 Age % %8616.7%97 Age % %5311.5%59 Age % %5410.7%55 Age %1005.2%386.2%45 Age 75 or More10.8%1004.1%384.4%41 Age and Presence of Children Age < 67.3%1005.0%696.9%95 Age % %5710.5%57 Age < 6 & %1002.4%373.9%60 No Children67.8% % %116 Housing Tenure Own65.0% %3432.1%49 Rent35.0% % %194 Education of Head of Household Not a High School Graduate 12.7%1006.4%508.4%66 High School Graduate 25.3% %6219.7%78 Some College28.7% % %120 College Graduate19.3% %9219.0%98 Post College Degree 14.1% % %132 Demography Reference2 mile Ring3 mile Ring % HHs HHs Index % HHs HHs Index % HHs HHs Index Demography Reference2 mile Ring3 mile Ring % HHs HHs Index % HHs HHs Index % HHs HHs Index Age of Head of Household Age %1005.1%1274.5%111 Age % % %136 Age % % %150 Age % % %109 Age % %8413.7%71 Age %1009.8%718.2%60 Age 75 or More10.8%1009.5%885.8%53 Age and Presence of Children Age < 67.3%1006.5%8910.0%137 Age % %9821.4%116 Age < 6 & % % %223 No Children67.8% %9154.1%80 Housing Tenure Own65.0% %9365.7%101 Rent35.0% % %98 Education of Head of Household Not a High School Graduate 12.7% % %127 High School Graduate 25.3% %8626.7%106 Some College28.7% %8023.7%82 College Graduate19.3% % %116 Post College Degree 14.1% % %80

Circular Trade Area: Wal-Mart MLK and PC DemographyReference 2 mile Ring 3 mile Ring % HHsHHs Index% HHsHHs Index% HHsHHs Index Race of Head of Household White68.7% % %118 Black12.0%1007.4%616.0%50 Hispanic12.6%1005.9%474.9%39 Asian4.5%1003.0%664.3%95 Other2.3%1003.2%1423.6%161 Number of Persons 1 Person27.2% % %146 2 Persons32.3% % %100 3 Persons16.2% %7513.8%85 4 Persons13.1%1006.8%528.7%66 5+ Persons11.1%1003.6%325.2%46 Household Income Under $10,0007.4% % %278 $10,000 - $19, % % %175 $20,000 - $29, % % %118 $30,000 - $39,9999.8%1009.0%919.6%98 $40,000 - $49,9998.9% %1218.2%92 $50,000 - $74, % %6914.1%79 $75,000 - $99, %1003.0%255.8%48 $100,000 - $149, %1004.1%327.8%60 $150,000 or More9.8%1001.8%182.8%29 Demography Reference2 mile Ring3 mile Ring % HHs HHs Index % HHs HHs Index % HHs HHs Index Race of Head of Household White68.7% % %105 Black12.0%1001.9%162.3%19 Hispanic12.6% % %164 Asian4.5%1002.7%602.9%65 Other2.3%1001.8%781.9%83 Number of Persons 1 Person27.2% %8618.5%68 2 Persons32.3% %8727.2%84 3 Persons16.2% %9718.2%112 4 Persons13.1% % % Persons11.1% % %162 Household Income Under $10,0007.4%1002.4%334.5%61 $10,000 - $19, %1007.1%666.3%58 $20,000 - $29, %1008.5%807.9%75 $30,000 - $39, %1008.6%8810.4%106 $40,000 - $49, % %1328.4%95 $50,000 - $74, % % %133 $75,000 - $99, % % %111 $100,000 - $149, % % %107 $150,000 or More 9.8% % %118

Product Snapshot: Maruchan

5 D’s of Driving Category Revenue Demographic: There are very few brands Depth: For areas such as college towns or low income areas, depth is important for Ramen lovers Differentiation: Unfortunately there is very differentiation of Ramen noodles. Flavors is as crazy as it gets Deal: Not many deals because there is no room for discounts Dependence: Zero Private label or Dependence on certain brand